Fundraising Spree in China's P2P Space

China’s sprawling peer-to-peer lending market is set to benefit from a substantial influx of equity capital.

Dianrong.com is reportedly looking to raise as much as $500m in a round that will likely take place some time before March next year. Founder and CEO Soul Htite unveiled the platform’s fundraising plans in an interview with the Wall Street Journal, revealing also that the cash would be used to expand across China and other emerging markets. Dianrong last landed an equity investment in August of this year, when the platform secured $207m in a round that was led by Standard Chartered’s private equity arm and China Fintech Fund.

But Dianrong is not alone in raising (or planning to raise) vast sums of equity capital. Only last week we received an update on the impending IPO of CreditEase’s consumer lending platform Yirendai – which will look to raise up to $100m through a listing on the New York Stock Exchange.

The Ping An-backed Lufax is also in the market for further equity, as FinanceAsia reported last week. The fundraise has been referred to as a “pre-IPO stake sale”. Lufax’s last fundraising round was a $485 monster, led by BlackPine Private Equity Partners, that valued the company at around $10 billion (a “decacorn”, in Silicon Valley-speak).

Gregory Gibb, Chairman of Lufax, told FinanceAsia in early November that private funding is “extremely efficient and still widely available for us”. Indeed, the abundance of private equity capital that appears to be available is likely keeping the likes of Dianrong and Lufax away from the public markets, for the time being at least.

According to a recent report from online lender/data hub Wangdaizhijia and consulting firm Yingcan, monthly lending volumes in Chinese P2P reached 120 billion yuan ($19bn) in October. Venture capital and private equity firms certainly seem to believe that these gaudy volumes will only continue to grow.